Wednesday, March 03, 2010

Groupon responds to class action lawsuit with own class action effort

Earlier this week, law firm Edelson McGuire filed a class action lawsuit against Groupon, a Chicago-based company that offers daily discounts online to local businesses. The lawsuit accuses Groupon of violating gift certificate laws by including expiration dates on the discounts.

Groupon CEO and founder Andrew Mason responded to the lawsuit on his blog, saying he would fight fire with fire.

"In fact, we've decided that the best way to respond is by organizing our own class action,” he wrote. “If there actually are customers out there that feel like we've let them down, we want to get them their money as quickly as possible. Join our class action here."

The class-action suit filed by Edelson McGuire on Tuesday states, "Groupon employs a business model where consumers are enticed to purchase a gift certificate, and after the consumer agrees to purchase the certificate, Groupon imposes post-contractual terms on the consumer containing illegal expiration dates.”

The suit says Groupon “expressly advertises itself as a company that does not impose, in its own words, 'gotchas,' on the consumer. In clear violation of the law, Groupon imposes illegal terms or 'gotchas,' post-agreement, on the very consumers it prides itself on helping.”

"As a company with one of the most irrationally liberal customer satisfaction policies on the planet (we refund anyone that feels like Groupon let them down for any reason) we're baffled by this whole thing," Mason wrote.

"We can think of two possible explanations for this lawsuit,” Mason wrote. “1. The law firm sees an opportunity to exploit our success and make a bunch of money. “2. We are indeed systematically deceiving our customers, but instead of taking advantage of our 100 percent open refund policy or telling us about their problems or sharing them in a public forum, our customers are secretly gossiping about them to each other and Edelson McGuire, kind of like Emily Johnson did against me in 9th grade (Emily if you are reading this I want my cabbage patch doll back)."

Personally, I love Groupon. I've bought and used almost a dozen and have gotten a lot of my friends hooked on the daily deals as well.

Frankly, I'm confused about what Edelson McGuire's claim even is. They aren't gift certificates, they're discounts, and the terms are spelled out on every deal. I've never had a single issue.

And to anyone thinking about jumping on the EM bandwagon, remember that for every individual on the class action suit, you get a fraction of what the lawyers get.

EM - There are literally millions of great causes you could be fighting for, (perhaps Cancer? Women's rights? Healthcare for children?) but you choose to focus on Groupon. To me you look frivolous and pathetic. I hope justice is served.

I'm a happy Groupon customer and a litigation attorney in Chicago. The lawyer at Edelson McGuire who took on this case and filed this suit must have no conscience, must have no social life, no love for family or friendships and definitely does not have a place in heaven. This type of lawsuit brings nothing but shame on the legal profession and does nothing to further the interests of justice or consumer fairness. I am embarrassed to be a lawyer after reading about this lawsuit. Shame on the lawyer who took on this case and shame on Edelson McGuire. The law firm of Edelson McGuire has clearly fallen onto hard times if it must pursue such a frivolous and mean spirited lawsuit. I cannot think of a bigger humiliation for Edelson McGuire if business has been so bad that it must resort to this type of foolish litigation. Best of luck to Groupon and its owners. I hope this matter is dismissed soon.

i'm a very happy groupon user - i think i've bought at least 10, if not more, and have never had an issue. as a consumer, you know to read the fine print - which i believe groupon even points an arrow to on each day's groupon, saying 'the fine print!' in bolder letters. there it tells you how long you have to use your groupons. i've actually gotten emails that have given me a reminder that one of my groupons is expiring (and honestly the majority i've gotten, if not for a particular game or something, are about a year, which is great) - that way i won't forget to use them. not many businesses do that these days, and i find that very respectable that even after having gotten my money, they want to make sure i get to use my discount.

this lawsuit truly does not make sense to me, since i have never had a problem with viewing deadlines, and i have also recruited numerous friends, in chicago and elsewhere since they continue to add new cities all the time - none of them have had any problems that i know of anymore either. so back off EM, and let groupon continue to help us out in these tough times when any discount is appreciated and enjoyed!

I love Groupon and have used at least 10 in the last year. I find this lawsuit almost humorous in that the terms of the deal (including expiration dates) are made very very clear with each purchase. Additionally, Groupon sends you an email reminding you to use your Groupon if it's about to expire. We just did this with Marche...thank you Groupon for the reminder, for the service and for the great deals which have allowed me to try many new restaurants at a deeply discounted price! I hope this goes away quickly and doesn't result in some insane ruling that destroys the Groupon business model.

Andrew and Joe are cool, too bad that the company's chief money men (Eric Lefkofsky and Brad Keywell) have had lawsuit after lawsuit waged against them (just google "Eric Lefkofsky fraud"). More of the same.

How are the expiration dates imposed after the contract? It clearly states the expiration in the details. It's like all those idiots who ask "Can I use more than one?" When it clearly says, one per person/table. Why do we cater to lazy morons who refuse to read?

If a Groupon member does not redeem their coupons for full face value - which are sold for roughly half of their actual value - the coupons are still redeemable at purchase price forever. So where's the violation of the gift certificate law?

Our first experience with Groupon is our last. We had a situation where we got a great deal on greens fees for a golf course. The golf course didn't take reservations more than 1 week in advance and you could never get a tee time. We tried on 4 separate occasions and couldn't get a tee time. Weekdays too! Money completely wasted. I won't use one of their stupid groupons ever again.

They're being sued 'cause their service actually makes people happy!!! Misery loves company!! I love opening up my email with the hopes of finding a good deal for something I like. And yes I do have a life...

For every entry that talks about 'Gift Certificate Law', please read the other comments that point out that these are DISCOUNTS - - NOT GIFT CERTIFICATES! Using the Gift Certificate logic, ALL coupons and discount programs would be in violation of the law, including those for grocery stores and the like! EM seriously needs to get a reality check!

are you going to sue bed bath and beyond to because of the expiration dates on their 20% off coupons and for letting you use 5 per check out for 5 items when really they accept them if they are 5 years old?

This is really sad... i know they called personal injury lawyers "ambulance chasers" what do they call the pathetic people at this law firm.. I hope you can sleep at night knowing that you are wasting your time on a cause that you will SOOOOO lose.

Jay Dubs you should probably do your research before making such a comment.